Equine Medical Insurance…The times they are a changing.
By Kent Allen DVM
When you remember equine medical insurance from the past, it was pretty easy to figure out. You
bought a mortality policy on your horse and if you wanted to, you added a medical/surgical policy. You
typically paid a $250 premium and a $250 deductible which would allow coverage by the insurance
company for any surgical or medical treatments as well as diagnostics. If your horse was diagnosed with
a problem that the insurance company paid for, there would be an exclusion and provided no further
complications were encountered, this exclusion could be reinstated in the future. That was back when
life was simple and most diagnostics and treatments were not big ticket items. Heads of insurance
companies told me back in those days that the mortality policies were the money makers and that
although the medical and surgical policies were the loss leaders, they were necessary to compete. That
is why you could never buy a medical policy without a mortality policy. Well things have certainly
changed.
As I referenced in the Chronicle article “Between the Rounds- “The Snowball we dared not hoped for””,
equine veterinary medicine has made some amazing strides in the last few years. Some of these
treatments and diagnostics are expensive. Nowadays, MRI and stem cells, for example, cost more than
a surgical colic would have a few years ago. Add on nuclear scintigraphy, shock wave therapy and
various other medications and the price tag for diagnosing and fixing your horse can mount up. Is it
worth it? Sure it is. Veterinary medicine is much more accurate in diagnostics and much more successful
with treatments than just a few years ago.
What has been happening in the equine medical insurance business and who are the players? The
Insurance Company is a company that markets equine insurance policies; they are in turn reinsured by
big insurance companies in the background. The first person you will probably contact is an Agent; this
person sells the policy that will cover your horse. They may work for the company or be independent or
even represent several companies that market equine insurance policies. The Agent is responsible for
helping you purchase the correct policy for you and your horse. The person you contact when you have
a problem with your horse that may involve the insurance company is the Adjuster. The Adjuster
interprets the policy and tells you what is covered with regards to the problem. The company that
offers the insurance product you have also readjusts it every year and puts exclusions on what it will
cover. Those people are called Underwriters because they underwrite the risk that the company is
willing to take with your horse. One of the major differences in equine medical insurance and human is
this exclusion principle. While human policies increase each year dependent on health costs and your
risk, the equine version of it has a relatively constant cost but excludes risks identified during the
previous year. Like other companies in the world some insurance companies are very knowledgeable
and experienced and others are merely occupying a cubicle, ask around as to which your company is.
Now, unknown to most people, a whole host of changes are coming to your equine medical policy. If
you own an equine medical insurance policy, you should be paying attention to the following
paragraphs.
Prior to buying an insurance policy, consider what coverage you want. Be aware that basic insurance
includes mortality coverage only. Additional coverages may include surgical only, major
medical/surgical and personal liability; however, these policies come with associated fees. In the sports
medicine field, major medical insurance policies are used commonly to help cover lameness diagnostics
and treatments. When shopping for an insurance policy, it’s worthwhile to call different companies and
agents and compare estimates. Be sure to talk directly to an agent and get answers to specific questions
such as what is the price of the premium? What does the policy cover? Is there a deductible and copayments? Different companies have different fees and coverage so it’s important to clarify these
details ahead of time. One of the confusing components of modern equine insurance is that recently
certain conditions, such as “navicular disease” or ”navicular syndrome”, are not covered. Not only is
there no definition provided for these terms but with the advancement of veterinary diagnostic imaging
the terms themselves have, in fact, become obsolete. These types of conditions are of an athletic injury
nature and there is simply no way of predicting if your horse will become affected in the future. Further
confounding the matter, questions pertaining to such conditions are not specified on the insurance
forms and so without reading your policy in detail, you may not realize that these specific exclusions
exist until a problem arises. Read the policy carefully and clarify any questions you may have with your
agent. Also find out who will be the underwriter and adjuster for your policy. Finally, before buying a
policy make sure you understand all of the insurance specific verbiage and be aware of vague
terminology.
Before providing coverage, the insurance company will need certain details about your horse. For
example, mortality policies require the market value of your horse. A major medical policy may require
further information regarding the medical history and current health status of your horse. This will be
provided by your veterinarian when he/she submits the medical form. The insurance company will ask
questions about pre-existing conditions, these need to be answered carefully.
Once you have a policy, develop a relationship with your agent. Also, familiarize yourself with the
coverage details of your policy prior to filing a claim. Insurance companies will not cover any veterinary
services associated with the maintenance and routine treatment of healthy animals (such as Legend and
Adequan injections). Many policies will only cover a certain percentage or set amount for certain
diagnostics and treatments. For example, a policy may only cover shockwave treatment up to a certain
dollar amount. Some policies only cover up to 50% of major diagnostics, such as nuclear scintigraphy
and MRI.
It is very important to know the correct channels of communication between agent, client and
veterinarian, as well as the timing of communications. Most policies require immediate notification of
the insurance company of any veterinary service and/or diagnostic testing. Once they have been
notified, the insurance company will then send the veterinarian a report to fill out. The veterinarian will
provide the company with all the required information regarding diagnoses, treatments and prognoses.
As the owner, you may be required to send in the complete billing information; however, the
veterinarian can send this information in for you too. Be aware that some policies will start a timer on
your claim from the first known claim and that they will not cover that problem past that point.
Familiarize yourself with the time frame covered by your policy as this varies between policies!
Finally, it is important to realize that the insurance company may make exclusions from your policy due
to a claim. You will receive these exclusions once a year at the anniversary date of your policy or after
an injury that was treated; it is important to review these exclusions as they should be both specific and
rational. Sometimes they are not. For example, a whole limb should not be excluded based on the
diagnosis of proximal suspensory desmitis (an area that is a few centimeters in size). Overly generalized
exclusions should, and can, be challenged successfully. Most veterinary practices will be very specific on
a diagnosis to treat your horse correctly and help prevent these vague exclusions. In addition, if you can
provide proof that a horse has recovered from a certain injury the insurance company may remove that
exclusion.
The other problem that can occur with exclusions is that sometimes underwriters with little or no
veterinary experience are gleaning veterinary reports for words such as sidebone or navicular and then
assigning exclusions to them. It may not matter to them that these words are part of a complete
veterinary report and have nothing to do with the diagnosis of the case, and an exclusion is issued
anyway. Many people don’t read their policy in enough detail to realize this was done erroneously until
their window to challenge it has passed.
Things have changed dramatically in the equine insurance industry. For example, some companies have
increased the mortality rates. Other companies are increasing their rates on equine medical and
surgical policies, and most are significantly limiting what they will cover. So in most cases, the horse
owner is getting less coverage for their insurance dollar. Ideally, insurance companies would be upfront
with regards to the coverage of these sophisticated and expensive diagnostics and treatments. To be
fair some companies are stepping up and doing just that but some are vague, hiding behind insurance
terms and hidden language leaving the horse owner holding the bag. In closing, find a good agent who
knows you and your horse as well as the equine insurance industry. Be sure to investigate your policy,
read it carefully and understand the terms. Finally, challenge vague, generalized or ridiculous exclusions
when they are presented to you.